Swiss multi-asset institutional electronic trading firm Compagnie Financiere Tradition has demonstrated innovative prowess over the last year, with the development and launch of its ParFX trading platform which gained the support of many banks across Western markets.
Activity during this year has, along with many peers, painted a different picture, which has been defined by the firm’s issuance of its results for the first half of 2014.
During this period, revenue from the online FX trading platform for retail investors in Japan, Gaitame.com, declined by 37.2% at constant exchange rates compared with first-half 2013 which benefited from buoyant activity levels in the foreign exchange market. This downturn is congruent with many other Japanese retail FX companies, serving as further confirmation that Japan, which accounts for 35% to 40% of all retail FX volume worldwide, is far from immune to periods of very low trading activity across the board.
Gaitame completed the first three months of this year with a significant downturn when compared with early 2013, as reported by LeapRate in April.
As far as Compagnie Financiere Tradition’s entire operations are concerned, the company achieved a consolidated revenue for the first six months of CHF 425.4 million, against CHF 475.9 million in the first half of 2013, a decline of 7.8% in constant currencies.
After a first quarter decline of 2.8% compared with the equivalent period last year, consolidated revenue fell 12.8% at constant exchange rates during the second quarter. Operating profit for the period declined 3.4% in constant currencies to CHF 26.8 million for a margin of 6.3% compared with 6.0% in the first half of 2013.
An aspect where the group’s investment in technology has borne fruit is with its Trad-X platform. Since its launch, Trad-X has matched more than 18,000 separate orders in interest rate swaps, amounting to a notional matched of more than CHF 1.1 trillion (single count). The phasing in since February of products traded through SEFs in the United States progressed trading activities on the platform, with Trad-X achieving record electronic trading volumes for US dollar swaps consecutively in May and June. During the period, Trad-X successfully extended its offering to Euro Short End products.
Whilst this is indeed a boon for the company as a whole, its retail FX volumes continue to fall short of those achieved in the halcyon days of summer 2013, a matter which is blighting many firms well into the second half of this year.
Chart: Financial summary for entire operations of Compagnie Financiere Tradition
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